Becoming an employer

1. Register as an employer

Get yourself registered as an employer with HMRC. This can’t be done more than two months before you start paying employees, but must be completed before the first payday and takes up to five days to be processed. Once you are registered and you have your employer PAYE reference number, you can pay your employees on time and in line with tax regulations.

2. Carry out the relevant checks

Ensure your potential employee has the right to work in the UK. You can verify this, either by carrying out a check with the HMRC online, or by asking them to provide you with the relevant codes and documents, such as a valid passport.

Sometimes you could do jobs that involve vulnerable people or that have high security regulations. In these cases, it may be necessary for your employee to have a Disclosure and Barring Service (DBS) background check. These can be requested directly from DBS and various levels of checks can be carried depending on the requirements of your work.

3. Produce the relevant contracts

When you take on a new team member, you need to make sure both your business and employees are protected legally. If you employ someone for more than a month, you need to put together a statement of employment outlining all terms and conditions. One part of this document is the principal statement, which needs to cover the following aspects:

• The business’s name
• The employee’s name, job title or a description of work and start date
• If a previous job counts towards a period of continuous employment, the date the period started
• When and what they will be paid
• Hours of work including whether they will have to work Sundays, nights or overtime
• Holiday entitlement and if that includes public holidays
• Where they will be working and whether they might have to relocate
• If an employee works in different places, where these will be and what the employer’s address is

In addition to this principal statement, a further written statement must be produced containing details on notice periods, collective agreements, pensions, and any temporary work information.

4. Decide on pay and pensions

Decide what you are going to pay and remember that you must pay your team members according to The National Minimum Wage.  Check out the handy online tool on the UK Government website, to work out the minimum wage rate.

On top of this, if your employee is eligible, you must provide a workplace pension scheme as soon as your first worker starts. They can participate if they are between 22 and the State Pension age; earn at least £10,000 per year; and they usually work in the UK – this includes people who are based in the UK but travel for work.

5. Get insured

As soon are you become an employer, by law you must obtain Employers’ Liability insurance. This will cover you to help pay compensation if an employee is injured or becomes ill because of work they have carried out for you. Your policy must provide cover for at least £5 million and come from an authorised provider.  If you don’t have this cover you could end up with daily fines of £2500 until you get a policy.

For more information about expanding your team, visit: https://www.gov.uk/employ-someone